Can Pakistan’s digital transformation drive growth?

New Drivers of growth bring promise of upside

Digital technology innovation is transforming economies and investments in sustainable development are likely to be the leading drivers of growth for the coming  years.  With digital developments spurred on by COVID, a number of governments invested in making the changeover to digital processes and services; the internet, communication and digital technology have shaped development.

Dynamic economies of our time are moving from old growth drivers based on low-cost manufacturing or services to new growth drivers

Dynamic economies of our time are moving from old growth drivers based on low-cost manufacturing or services to new growth drivers that are enabled by technology, new materials and value-added manufacturing and services. Technology enabled industrial capacity and supply chain, together with innovation, is driving up the value of exports for countries like South Korea and Vietnam.

There is also evidence that digitally evolved societies are more inclusive, particularly pertaining to women labor force participation. In a post Chat GPT world, Artificial Intelligence presents vast potential to enhance capacity and productivity and bring innovation to public sector service delivery.

Different approaches and policy actions have resulted in various country trajectories; while the paths taken may have been different, there appears to be a sustained state commitment to the digital agenda in nearly all success stories. In some cases, there is clear evidence of a relationship between long-term public policy frameworks and the digital transformation of a country.

Can Pakistan’s digital transformation contribute to the much needed growth?  Can the nation leapfrog and transition to achieve an economic growth through inclusive digital transformation?

Pakistan is the third largest wheat producer in Asia and ranks among the top 10 for other agricultural products, with exports surpassing $6 billion. In South Korea, the manufacturing sector accounts for 12.5% of their $1.7 trillion GDP.

India’s technology exports are approaching $200 billion, growing at an annual rate of 8.3%, contributing roughly $16 billion in 2022. In comparison, Saudi Arabia’s crude oil exports were valued at $224.8 billion in 2022.

IT and Business process outsourcing (BPO) sectors form the largest portion (over 60%) of India’s service exports (EY India 2023). This has driven the growth of total services exports at a compound annual growth rate of 14% in dollar terms over the past twenty years.

We can learn from the journeys taken by other developing countries in the Asia and Pacific region; however, such a digital transformation would require a long-term public policy commitment that can lead to digital evolution of the government and society.